Boeing to spend $50 million to support 737 MAX crash victim families

Michael Stumo, father of Samya Stumo, victim of Flight ET302; is embraced by U.S. Rep. Angie Craig (D-MN) as he and Paul Njoroge, representing family members of EA Flight 302, arrive to testify before a House Transportation and Infrastructure Aviation Subcommittee hearing on "State of Aviation Safety" on Capitol Hill in Washington, U.S., July 17, 2019. REUTERS/Joshua Roberts

By David Shepardson

WASHINGTON (Reuters) – Boeing Co said on Wednesday it will dedicate half of a $100 million fund it created to address two crashes of its 737 MAX planes to financial relief for the families of those killed, with compensation expert Ken Feinberg hired by the world’s largest plane maker to oversee the distribution.

The announcement of Feinberg’s hiring came minutes before the start of a U.S. House of Representatives hearing that featured dramatic testimony by Paul Njoroge, a father who lost three children, his wife and mother-in-law in a 737 MAX Ethiopian Air crash in March.

Feinberg told Reuters his team will “start immediately drafting a claims protocol for those eligible,” with the first meeting with Chicago-based Boeing later this week in Washington.

The 737 MAX, Boeing’s best-selling jet, was grounded globally in March following the Ethiopian Airlines crash after a similar Lion Air disaster in Indonesia in October. The two crashes killed 346 people.

Njoroge told reporters after he testified that he did not think the public would trust Boeing going forward. “Do you want to fly in those planes? Do you want your children to fly in those planes?” he asked. “I don’t have any more children.”

Njoroge told a House subcommittee that he still has “nightmares about how (his children) must have clung to their mother crying” during the doomed flight.

Njoroge said Boeing has blamed “innocent pilots who had no knowledge and were given no information of the new and flawed MCAS system that could overpower pilots.” Boeing did not immediately comment on his testimony.

A Boeing official told Reuters last month that after a new software flaw emerged the company will not submit an MCAS software upgrade and training revision until September, which means the planes will not resume flying until November at the earliest. U.S. airlines have canceled flights.

Boeing said on July 3 it would give $100 million over multiple years to local governments and non-profit organizations to help families and communities affected by the crashes in Indonesia and Ethiopia.

Feinberg, who will jointly administer the fund with lawyer Camille Biros, said the other $50 million in the fund is earmarked for government and community projects.

Boeing reiterated on Wednesday that the money distributed through the fund would be independent from the outcome of any lawsuits. The company is facing a slew of litigation from the families of victims of both crashes.

“Through our partnership with Feinberg and Biros, we hope affected families receive needed assistance as quickly and efficiently as possible,” Boeing Chief Executive Dennis Muilenburg said in a statement.

Feinberg has administered many compensation funds including for victims of the Sept. 11, 2001, attacks on the United States, General Motors ignition switch crashes and numerous school shootings.

Boeing’s initial announcement of the $100 million fund was met with anger by some victims’ families, who described the offer as a publicity stunt.

At the hearing in Washington, Representative Peter DeFazio, chairman of the House Transportation Committee, said he would call Boeing officials to testify at a hearing. DeFazio said the committee is in the middle of an in-depth investigation and had just received a “trove” of documents that panel investigators are reviewing.

(Reporting by David Sheperdson in Washington and Ankit Ajmera in Bengaluru; Writing by Tracy Rucinski and David Sheperdson; Editing by Will Dunham and Bill Trott)